Credit Suisse launches UK bonus tax legal action

Credit Suisse has launched a legal battle to reclaim hundreds of millions in compensation from the UK bank bonus tax.

The tax, which was passed into law by the Labour government in 2010, introduced a one-off 50% levy on banker bonuses.

According to Bloomberg, in a court hearing on Monday lawyers for Credit Suisse claimed the bank paid SFr 440 million (£320 million) on the tax.

The tax was implemented in the wake of the global financial crisis following a series of banking scandals. The 50% levy was paid by banks, with individuals then paying income tax on the bonus they received.

The tax netted the government £3.4 billion, around five times the amount it had anticipated.

Credit Suisse did not require a government bailout during the financial crisis and therefore questioned whether the tax should be viewed as 'state-aided' measure.

The Swiss bank cut its bonus pool by 5% to help fund the tax, while its 400 UK-based managing directors saw their rewards slashed by an additional 30%.

In an emailed statement seen by Bloomberg, the bank is demanding both repayments and damages from HM Revenue and Customs, citing the 'arbitrary impact' of the levy.

'Credit Suisse has sought to resolve Bank Payroll Tax-related issues over a number of years with HM Revenue and Customs,' a Credit Suisse spokesperson said.

'These technical issues are now the subject of formal proceedings, which Credit Suisse has a legitimate interest in pursuing in order to provide certainty as to the proper scope and application of the 2010 one-off tax.'

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